Note: This story was updated March 1 with finalized budget information from the Feb. 23 school board meeting.
The New Westminster school district has turned around its budget for the 2020/21 school year, moving almost back into the black instead of posting an anticipated $1.38-million deficit.
The school board passed its amended budget for 2020/21 at its Feb. 23 meeting with a deficit of just $115,000 – money that will be funded out of the district’s surplus reserves to balance the books.
Secretary-treasurer Bettina Ketcham, in presenting budget information to the board’s Feb. 9 operations committee meeting, noted that when the board passed its preliminary budget back in May 2020, that budget was based on a number of “intentionally conservative” assumptions because of the uncertainty surrounding the COVID-19 pandemic. At the time, she pointed out, the district didn’t yet know about extra provincial and federal grants that would be coming its way, and it had to leave space for added budget pressures stemming from the pandemic.
The better-than-expected financial picture comes from both higher than anticipated revenues and lower expenses.
On the revenue side, the preliminary budget accounted for a projected large loss in revenue from international students, forecasting for only 88 students because of border closures and international travel restrictions. The district has, in fact, landed at about 110 international students, meaning $445,000 in revenue that wasn’t anticipated in May.
The district also received a higher-than-expected provincial grant for this school year, due in large part to a “salary differential” paid out to districts whose teacher salaries are higher than the provincial average.
On the expenses side, the district has been able to save money in wages, to the tune of $356,000 – stemming from both lower costs for teachers-on-call and federal funding that was used to cover staffing costs for the new kindergarten-to-Grade 8 online program.
It also found $426,000 in one-time savings from various departments in a wide range of categories, including professional development and travel costs, and furniture and equipment costs.
(A full accounting can be found in the school board’s Feb. 23 agenda package.)
BOARD SHOULD 'HOLD TIGHT' ON SURPLUS
Moreover, both the provincial and federal governments provided special COVID-19 funding to school districts, of which New Westminster received $488,000 and $2.7 million, respectively.
Ketcham said that, taking all of that into account, the district’s financial picture is much more positive than it was in May.
The $1.38-million projected deficit would have come out of the district’s surplus reserves. The school board had also voted to set aside more than $1.7 million to deal with emerging issues around the COVID-19 pandemic – money Ketcham suggested can now be freed up.
All told, the district is anticipating having a $3.8-million surplus in reserve by the end of June 2021.
But Ketcham cautioned the board against deciding to spend that money on anything else just yet, given the continuing uncertainty of the pandemic.
“Overall the district is in a much better position than we were in the earlier part of the year. The only caution I would say is, ‘Let’s hold tight,’” Ketcham said. “I think we need to hang tight for the balance of the year until we get into more knowns with respect to the preliminary budget process.”
Ketcham reiterated that message to the board at its Feb. 23 meeting, noting the district always wants to keep some surplus as a “rainy day fund” to deal with any unexpected situations that might come up over the coming year. She recommended the district hold about $2 million in reserves for that purpose.
Once the board starts setting out its preliminary budget for 2021/22 – a process that begins with provincial funding announcements coming in a few weeks’ time – Ketcham said the board can revisit the $3.8-million surplus.
She had previously pointed out that the district will want to focus any new spending on initiatives that relates to its strategic plan priorities. Those include anti-racism efforts, climate action, supports for the new neighbourhood learning centres at the new secondary school, mental health and technology upgrades.
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